Jan 27, 2025
The Santa Clarita Valley Water Agency is alerting the public about a series of rate hikes expected to raise the average monthly cost for its customers by anywhere from $28.97 to $32.10 over the next five years.  The first of two Proposition 218 meetings, named after the law guaranteeing the public a right to protest pending fee and rate increases, is set for 6 p.m. Feb. 5, according to Kevin Strauss, spokesman for SCV Water, adding there would also be a Zoom link for virtual attendees.  “This is probably the most unfavorable thing we have to do on the board, which is raising rates,” said SCV Water governing board Vice President Bill Cooper, when asked about the hikes.  A graphic from SCV Water explaining the projected rate increases notes there are several levels affecting its customers in different areas separately based on “legacy costs,” Strauss said in a phone interview Monday.  Typical residential customers in the former Newhall County Water District service area can expect to see the largest increase percentage-wise, a hike of $31.28 a month, roughly 54%, over the next five years. Strauss said the typical customer for the baseline rate was defined as one who uses about 14 centum cubic feet of water, or a little over 10,000 gallons.  That same customer in the former Valencia Water Division service area is expected to see their cost go up from $63.99 to $96.09, a 50.1% increase over five years.  Customers in the Santa Clarita Water Division are projected to see the smallest increase, going from $67.69 a month to $96.66 for the same usage.  Strauss said the legacy costs are different for different service areas as they are calculated based on the assumed benefits that ratepayers have paid for prior to the agency’s formation in 2018.  Cooper said the new rates are based on the funds needed for operations and maintenance, and something that nearly everyone has seen increase over the past few years in the cost of doing business.  “The main cost that we’ve seen that’s really gone up on us is construction materials,” Cooper said, saying the current increase is estimated at 57% over the past few years, which really affects the agency’s bottom line.  SCV Water also has a couple hundred employees, including everyone from outreach to highly trained and specialized water engineers, which can be expensive, he added.  One of the ironic components to the funding challenge SCV Water mentioned in October is how reduced water usage, which has been a behavior the agency has encouraged and even subsidized, to a large extent, has the potential to hurt SCV Water’s bottom line. The cost-of-service review presented during that discussion indicated 32% less revenue for water consumption.   Strauss also acknowledged potential factors in the rate hike exist beyond the agency’s control, such as when the agency conducts a rate study with estimates for how many new customers a development might bring.  Rochelle Patterson, chief financial and administrative officer for SCV Water, mentioned a slowdown of development tied to COVID-19 as another factor impacting previous revenue projections, because the agency relies on new connection fees as a way to offset its costs.   “And so we assume based on, ‘Here’s the developments that are in planning, they’ve been approved by the city or the county, depending on the jurisdiction, and we anticipate completion, for example, let’s say in 2025,’” Strauss said. “If for whatever reason, those don’t come online, and that’s anticipated revenue, then that needs to be made up elsewhere.”  Cooper also said SCV Water’s involvement in class-action lawsuits against local polluters, including 3M and Whittaker Bermite, don’t really factor into the discussion, as monthly water rates aren’t the primary funding source for the plants that remove contaminants.  Both Cooper and Strauss mentioned the agency assesses the fairness of its rate increases with an affordability analysis, which is based on nationally accepted guidelines and regional salary assumptions.  The agency authorized a rate study in September, which presented a chart that would move SCV Water’s average monthly cost from the seventh cheapest to the fourth most expensive of 20 agencies in the region.  By 2029-30, all three service areas mentioned by the agency are expected to charge its customers annually between $1,065 (former NCWD area) to $1,159 for those formerly in the Santa Clarita Water Division.  The post SCV Water plans meetings over rate hikes  appeared first on Santa Clarita Valley Signal. ...read more read less
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